Thompson Payroll Service began in 2008 with 2,000,000 authorized and 450,000 issued and outstanding $7 par common

Question:

Thompson Payroll Service began in 2008 with 2,000,000 authorized and 450,000 issued and outstanding $7 par common shares. During 2008, Thompson entered into the following transactions:

a. Declared a $0.25 per share cash dividend on March 24.

b. Paid the $0.25 per share dividend on April 6.

c. Purchased 13,000 common shares for the treasury at a cost of $17 each on May 9.

d. Sold 4,600 unissued common shares for $29 per share on June 19.

e. Declared a $0.30 per share cash dividend on August 1.

f. Paid the $0.30 per share dividend on September 14.

g. Declared and paid a 20 percent stock dividend on October 25 when the market price of the common stock was $26 per share.

h. Declared a $0.50 per share cash dividend on November 20.

i. Paid the $0.50 per share dividend on December 20.

Required:

1. Prepare journal entries for each of these transactions.

2. What is the total amount of dividends (cash and stock) for the year?

3. Determine the effect on total assets and total stockholders' equity of these dividend transactions.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...